THE INSTITUTIONAL CEILING: ADVERTISING EFFECTIVENESS AS A GOVERNANCE PROBLEM IN EMERGING DIGITAL MARKETS

Research on advertising effectiveness is largely a science of what advertisers do, of targeting, creative, media, and message, and it treats the institutional environment in which advertising operates as background or as a constraint on permitted practice. This paper argues that the environment is not background but a determinant, and that it sets an upper bound on effectiveness that no advertiser skill can exceed. It develops the construct of the institutional ceiling, the maximum advertising effectiveness attainable in a market given the credibility of the governance institutions that make transactions safe, including the enforcement of data protection, consumer protection, fraud and contract law, and the availability of redress. Advertisers optimise below the ceiling; the ceiling itself is set by public governance, which no single firm can raise. Where governance is credible the ceiling is high and advertiser skill has room to act; where governance is weak the ceiling descends and optimisation has little to work with, because the trust deficit that weak institutions produce suppresses response regardless of how well an advertisement is made. The paper distinguishes the ceiling from the restrictiveness of rules, since credible enforcement raises the ceiling by building trust while over-restrictive rules can lower effectiveness by limiting targeting, and it introduces regulatory reach asymmetry, the mismatch between the borderless reach of advertising platforms and the national reach of the regulators who could raise the ceiling. Survey evidence from an emerging Nigerian market, where effectiveness was bounded by trust and mistrust rather than by targeting, motivates the account. The paper offers six propositions, a conceptual model, boundary conditions, and a testing agenda, and it draws the methodological implication that cross-market comparisons of advertising effectiveness confound advertiser skill with institutional quality. Its contribution is to reframe advertising effectiveness in emerging digital markets as, in substantial part, a governance problem.